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Panasonic to speed up M&A activity in Europe

Dutch subsidiary to identify and evaluate targets in $9bn investment push

A mock-up of an autonomous car interior is shown at the Panasonic booth during the 2017 CES in Las Vegas. Panasonic sees automobiles as a high growth area.   © Reuters

OSAKA -- Panasonic may transfer some functions tied to mergers and acquisitions to Europe so it can speed up overseas takeovers, the company's new chief financial officer told The Nikkei.

A Dutch intermediate stockholding company would take on certain strategic duties that are now handled by headquarters, CFO Hirokazu Umeda said in an interview. Umeda assumed his position this summer.

The Japanese electronics maker is accelerating its investment into automotive- and housing-related businesses, which it considers high-growth areas. The plan is to invest 1 trillion yen ($8.88 billion) in these fields over the four years starting in fiscal 2015. 

Competition is fierce. Panasonic is currently involved in a bidding war with South Korea's LG Electronics over Austrian automotive light supplier ZKW Group.

Panasonic's Chief Financial Officer Hirokazu Umeda

The Dutch subsidiary will likely be tasked with identifying and evaluating targets for acquisitions and business tie-ups, negotiating with investment banks, and approving capital investments. The unit currently handles investments in offshore subsidiaries and dividend payments.

While Panasonic struggles to rebuild its solar panel, semi-conductor and liquid crystal panel businesses, the company sees automotive- and housing-related businesses as high growth areas. Panasonic provides batteries to Tesla, for instance, and forecasts business opportunities in the electric vehicle market.

In 2015, Panasonic acquired shares in Ficosa International, a Spanish maker of rearview mirrors. The Japanese group lifted its stake in the affiliate this year, converting it into a consolidated subsidiary. Items related to the safety of a vehicle, including mirrors, require a vigorous approval process from local authorities. It is easier for Panasonic to acquire an established local company rather than building a new factory themselves.

In 2016, the company spent 180 billion yen purchasing Hussmann, a U.S. manufacturer of freezer display cases.

This July, the Osaka-based company split off strategic functions from its accounting and financial affairs division and established a corporate finance and investor relations department within the corporate strategy division. The aim is to maintain financial efficiency and health amid the investment push.

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